Energy Department Prohibits Rebates for Switching from Gas to Electric Appliances

The Energy Department issued new guidance Friday that bars states from offering rebates when households replace gas appliances with electric ones. The rule blocks payments for electric stoves, ovens, dryers, heat pumps and water heaters purchased to displace gas equipment. 8 billion in federal funding Congress approved under the Inflation Reduction Act of 2022 for two home rebate programs.

One program supplies rebates for space-heater, water-heater, cooling and insulation upgrades, with larger amounts available to families earning less than 80 percent of area median income. The second program targets electrification and offers payments to households earning less than 150 percent of local median income.

Under the second program, qualifying households could receive up to $8,000 for an electric heat pump, $1,750 for a heat pump water heater or $840 for an induction stove.

The new guidance ends eligibility for those payments when the purchase displaces a gas appliance. The Biden administration had promoted replacement of gas-powered equipment with electric models to cut emissions from fossil-fuel combustion. The Trump administration’s Friday directive reverses that approach for the covered rebate programs.

States administering the funds must now align their programs with the revised federal rules, which took effect immediately upon issuance.